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MSCI:N PRESS RELEASE RESULTS OF MSCI 2016 MARKET CLASSIFICATION REVIEW MSCi will delay including China a shares in the MScI Emerging Markets Index New York- June 14, 2016-MSCI Inc (NYSE: MSCI), a leading provider of global equity indexes, announced today that it will delay including china a shares in the MsCi Emerging Markets Index. Over recent months, Chinese authorities have introduced significant improvements in the accessibility of th China a shares market for global investors. These improvements touch the major categories previously cited as impediments to inclusion: (1)resolution of the issues regarding beneficial ownership, (2) enhanced regulations on trading suspension, which was flagged as the most critical by investors and ( 3) QFll policy changes aimed at addressing quota allocation and capital mobility restrictions " There have been significant steps toward the eventual inclusion of china a shares in the mScI Emerging Markets Index, said Remy Briand, MSCI Managing Director and Global Head of Research "They demonstrate a clear commitment by the chinese authorities to bring the accessibility of the china A shares market closer to international standards. We look forward to the continuation of policy momentum in addressing the remaining accessibi lity issues. Mr. Briand added " International institutional investors clearly indicated that they would like to see further improvements in the accessibility of the china a shares market before its inclusion in the msci Emerging Markets Index. In keeping with its standard practice, MSCi will monitor the implementation of the recently announced policy changes and will seek feedback from market participants. MSCI gathered feedback from market participants on the potential inclusion of China a shares in the MSCI Emerging Market Index during an extensive global consultation. Investors recognized the actions taken to further open the china a shares market and highlighted that the topic of beneficial ownership has been satisfactorily resolved. They generally stressed the need for a period of observation to assess the effectiveness of the QfIl quota allocation and capital mobility policy changes as well as the effectiveness of the new trading suspension policies. the 20% monthly repatriation limit remains a significant hurdle for investors that may be faced with redemptions such as mutual funds and must be satisfactorily addressed. Finally the local exchanges pre-approval restrictions on launching financial products remain unaddressed. Hence, MSCi will retain the China a shares inclusion proposal as part of the 2017 Market Classification Review MSCi does not rule out a potential off-cycle announcement should further significant positive developments occur ahead of June 2017 In todays announcement, MsCi also said that the msci Pakistan Index will be reclassified to Emerging Markets status, coinciding with the may 2017 Semi-Annual Index revietPage | 1 PRESS RELEASE RESULTS OF MSCI 2016 MARKET CLASSIFICATION REVIEW MSCI will delay including China A shares in the MSCI Emerging Markets Index New York – June 14, 2016 – MSCI Inc. (NYSE: MSCI), a leading provider of global equity indexes, announced today that it will delay including China A shares in the MSCI Emerging Markets Index. Over recent months, Chinese authorities have introduced significant improvements in the accessibility of the China A shares market for global investors. These improvements touch the major categories previously cited as impediments to inclusion: (1) resolution of the issues regarding beneficial ownership, (2) enhanced regulations on trading suspension, which was flagged as the most critical by investors, and (3) QFII policy changes aimed at addressing quota allocation and capital mobility restrictions. “There have been significant steps toward the eventual inclusion of China A shares in the MSCI Emerging Markets Index,” said Remy Briand, MSCI Managing Director and Global Head of Research. “They demonstrate a clear commitment by the Chinese authorities to bring the accessibility of the China A shares market closer to international standards. We look forward to the continuation of policy momentum in addressing the remaining accessibility issues.” Mr. Briand added, “International institutional investors clearly indicated that they would like to see further improvements in the accessibility of the China A shares market before its inclusion in the MSCI Emerging Markets Index. In keeping with its standard practice, MSCI will monitor the implementation of the recently announced policy changes and will seek feedback from market participants.” MSCI gathered feedback from market participants on the potential inclusion of China A shares in the MSCI Emerging Market Index during an extensive global consultation. Investors recognized the actions taken to further open the China A shares market and highlighted that the topic of beneficial ownership has been satisfactorily resolved. They generally stressed the need for a period of observation to assess the effectiveness of the QFII quota allocation and capital mobility policy changes as well as the effectiveness of the new trading suspension policies. The 20% monthly repatriation limit remains a significant hurdle for investors that may be faced with redemptions such as mutual funds and must be satisfactorily addressed. Finally, the local exchanges’ pre-approval restrictions on launching financial products remain unaddressed. Hence, MSCI will retain the China A shares inclusion proposal as part of the 2017 Market Classification Review. MSCI does not rule out a potential off-cycle announcement should further significant positive developments occur ahead of June 2017. In today’s announcement, MSCI also said that the MSCI Pakistan Index will be reclassified to Emerging Markets status, coinciding with the May 2017 Semi-Annual Index Review
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